Broker snap: New Unilever boss makes bright start

13th May 2009 13:05

Food and household products giant Unilever was one of the best performing blue-chips on Wednesday morning, helped by a positive note from Charles Stanley.The broker said it is upgrading its 'long-held negative recommendation' on the Anglo-Dutch company following the group's first quarter results and the positive impression created by Unilever's new chief executive, Paul Polman.'Whilst accepting that the business has undergone a profound and prolonged period of reorganisation and that substantial cost savings and synergy benefits have added little, incrementally, to earnings thus far, we increasingly take the view that under Mr Polman's stewardship Unilever can finally deliver on investor expectations and that this will be rewarded, in due course, by the much vaunted re-rating,' said Charles Stanley analyst Jeremy Batstone-Carr.The broker has raised its recommendation to 'accumulate' from 'sell'. It stopped short of upgrading to 'buy' because it still sees problem areas, such as weak volumes in Western Europe and Asia Africa CEE (emerging markets).However, Batstone-Carr has more confidence in the new management than it did in the old.'The company appears increasingly able (and willing) to understand and meet consumer needs in specific local markets without necessarily competing purely on price. This represents a significant a cultural change as is the increased focus on the global roll-out of key brands,' the broker said.